Bitcoin Investing

Independently-controlled cryptocurrencies such as Bitcoin, Ethereum and Litecoin may or may not survive in the long run, but blockchain technology is definitely here to stay. This technology has revolutionized how digital financial transactions are conducted, and it was only a matter of time before the big boys began to adopt it. Previously, I have written about how the Washington Post is hyping something known as ‘Fedcoin’, but Fedcoin does not yet exist. However, a digital currency that uses blockchain technology that is called ‘Utility Settlement Coin’ is actually very real, and it is currently being jointly developed by four of the largest banking giants on the entire planet. The following was recently reported by Wolf Richter…

UBS, BNY Mellon, Deutsche Bank, Santander, the market operator ICAP, and the startup Clearmatics formed an alliance in 2016 to explore the use of digital currency between financial institutions and central banks, using blockchain.

The ultimate goal of the project is to create a digital currency known as Utility Settlement Coin (USC), which will facilitate payment and settlement for institutional financial markets.

I decided that I had to know more about Utility Settlement Coin, and so I decided to go to the source.

USC is an asset-backed digital cash instrument implemented on distributed ledger technology for use within global institutional financial markets. USC is a series of cash assets, with a version for each of the major currencies (USD, EUR, GBP, CHF, etc.) and USC is convertible at parity with a bank deposit in the corresponding currency. USC is fully backed by cash assets held at a central bank. Spending a USC will be spending its paired real-world currency.

UBS and Clearmatics launched the concept in September 2015 to validate the potential benefits of USC for capital efficiency, settlement and systemic risk reduction in global financial markets. The project was initially incubated as part of the UBS Crypto 2.0 Pathfinder Program, UBS’s initiative for research and experimentation on blockchain.

This could ultimately turn out to be a complete and total gamechanger. UBS, BNY Mellon, Deutsche Bank and Santander are four of the biggest banks in the western world, and the fact that they are working on this project together is a sign that they are very serious about succeeding.

Will the general public still be willing to pay a huge premium for independently-controlled cryptocurrencies once the banksters start coming out with their own versions?

The cryptocurrency revolution is still in the very early stages, and nobody is exactly sure how it will end, but without a doubt the banksters will be a major player in this drama. If you doubt this, just consider what one of the top executives at UBS is saying about Utility Settlement Coin…

“Digital cash is a core component of a future financial market fabric based on blockchain technologies,” said Hyder Jaffrey, Head of Strategic Investment & FinTech Innovation at UBS Investment Bank. “There are several digital cash models being explored across the Street. The Utility Settlement Coin is focused on facilitating a new model for digital central bank cash.“

Digital central bank cash?

I don’t like the sound of that at all.

We definitely do not want the banksters to co-opt this movement. Blockchain technology should be used to free humanity from debt-based central banking, but instead the exact opposite could end up happening.

If someday independently-controlled cryptocurrencies are completely banned or suffocated nearly out of existence by oppressive regulation, the way would be clear for the banksters to force everyone to use their own digital currencies. There are many nations around the world that have already gone nearly cashless, and the potential for tyranny in a cashless system where all digital currency is controlled by the banksters would be absolutely off the charts.

Bitcoin, Ethereum, Litecoin and other major cryptocurrencies have been on a wild ride this year, and over the past 10 days the volatility that we have witnessed in the marketplace has been absolutely breathtaking. On December 17th, Bitcoin shot above $19,800 for a brief moment before it started plummeting dramatically. At one point the price of Bitcoin dipped below $11,000, which represented close to a 45 percent decline from the record high that it had hit just five days earlier. And Bitcoin was far from alone – virtually every other major cryptocurrency was also down between 25 and 50 percent during that five day period. But now almost all of them are bouncing back, and at this moment the price of Bitcoin is $14,219.99.

So where do things go from here?

There are many that believe that in the short-term the price of Bitcoin will fall back toward the actual cost of production. It has been estimated that the cost to produce a new Bitcoin is currently between three and four thousand dollars, and with the price of Bitcoin so high there is a tremendous incentive for Bitcoin miners to produce as many as possible right now.

Morgan Stanley analyst James Faucette and his team sent a research note to clients a few days ago suggesting that the real value of bitcoin might be … $0.

That’s zero dollars. (Bitcoin stood at around $14,400 at the time of writing.)

To back up his assessment, Faucette made the following arguments…

• Can Bitcoin be valued like a currency? No. There is no interest rate associated with Bitcoin.

• Like digital gold? Maybe. Does not have any intrinsic use like gold has in electronics or jewelry. But investors appear to be ascribing some value to it.

• Is it a payment network? Yes but it is tough to scale and does not charge a transaction fee.

Faucette also pointed out that the number of online retailers that accept Bitcoin is actually falling. Five of the top 500 e-commerce merchants accepted Bitcoin during the first quarter of 2016, but now only three still do.

In order for Bitcoin to have a sustainable long-term future, it must become a real currency that is widely used, but many would argue that it is already being surpassed by better and newer options. In fact, one top cryptocurrency expert recent stated that the old Bitcoin network “is as good as unusable”…

Emil Oldenburg, the co-founder of Bitcoin.com – one of the world’s largest sites devoted to the cryptocurrency – recently called the cryptocurrency the “most risky investment you can make,” after he switched to bitcoin cash, which he considers to be the future.

“The old bitcoin network is as good as unusable,” said in an interview with Swedish tech site Breakit.

That certainly doesn’t sound promising, but so far that hasn’t stopped the price of Bitcoin from heading into the stratosphere. So far in 2017 the price of Bitcoin has risen more than 1,400%, and that number is extremely impressive no matter how you look at it.

Of course virtually all of that “digital wealth” could disappear in just a matter of days during a major crash. The CEO of Patriarch Equity, Eric Schiffer, believers that Bitcoin investments are eventually heading for “a thermonuclear death”…

“I think bitcoin is a ‘tower of death,’” Schiffer says. “It is going to result in the imminent death of your investment – a thermonuclear death.

“Right now we are looking at a financial bubble that is bigger than the tulip craze and I believe that we are headed for a bitcoin crash that will supersede any financial worries of the 21st century,” he added. “People are going to be shocked when they try to liquify their bitcoins.”

Schiffer might be right.

After all, Bitcoin and other cryptocurrencies don’t have any intrinsic value. Essentially, they are nothing more than digital creations that only have value because people think they have value.

But those that got in back at the beginning and have cashed out now have made enormous amounts of money, and nobody can deny that.

With every form of “investing”, they are winners and there are losers. Unfortunately, those that chose to jump in at the height of the madness could end up losing very big. The following comes from Wolf Richter…

Betting on cryptos is a peculiar form of online gambling on a global scale that requires a consensus among participants that they only buy, and that you cannot ever cash out, and now that some folks are trying to cash out, the bets for everyone else are souring. The same dynamics that pushed prices up have reversed and are causing them to crash.

But what if the naysayers are wrong?

What if this current “Bitcoin crash” is just a bump in the road on the way to $40,000?

Years ago, the price of Bitcoin crashed 75 percent at one point. What would have happened if the early investors had all bailed out then instead of holding on until now?

Those that sold Bitcoin at $12,000 might end up really kicking themselves if the price of Bitcoin does hit $40,000 by the end of next year, and that is exactly what some top experts are projecting…

Billionaire investors and highly respected analysts including hedge fund investor Mike Novogratz, prominent financial analyst Max Keiser, and Fundstrat’s Tom Lee stated that the price of bitcoin will likely surpass the $40,000 margin by the end of 2018, and achieve a $1 trillion market cap.

To me, this is absolutely fascinating. On the one side, you have financial experts that believe that Bitcoin is going to zero, and on the other side you have financial experts that are projecting that someday a single Bitcoin will be worth one million dollars.

I don’t know which side will ultimately prevail, but it will be a lot of fun to watch how everything plays out.

Fedcoin doesn’t even exist yet, and yet the Washington Post is already hyping it as the primary cryptocurrency that we will be using in the future. Do they know something that they rest of us do not? Just a few days ago I warned that global central banks could eventually try to take control of the cryptocurrency phenomenon, and so I was deeply alarmed to see the Post publish this sort of an article. We want cryptocurrencies to stay completely independent, and we definitely do not want the Federal Reserve and other global central banks to start creating their own versions. Because of course once they create their own versions they will want to start restricting the use of any competitors.

The one thing that could derail the cryptocurrency revolution faster than anything else would be interference by national governments or global central banks. Unfortunately, now that Bitcoin, Litecoin, Ethereum and other cryptocurrencies are getting so much attention, it is inevitable that the powers that be will make a move.

On Monday, the Washington Post published an opinion piece by Professor Campbell R. Harvey of Duke University that was entitled “Bitcoin is big. But fedcoin is bigger.” These days, there is an agenda behind virtually everything that the Washington Post publishes, and so it is not just a coincidence that they have published an article with “fedcoin” in the title. Here is how that article begins…

Over the past few weeks, investors have been flocking to bitcoin, the digital currency whose value has soared by about 2,000 percent in the past year alone. And while many economists are cautioning against excitement about bitcoin — which is caught up in what may be one of the biggest speculative bubbles in history — it’s important to note just how revolutionary the technology may be.

Indeed, the technology underlying bitcoin could fundamentally change the way we think of money.

Professor Harvey goes on to explain that it is “only a matter of time before paper money is phased out”, and that some version of “fedcoin” is inevitable.

But it doesn’t have to be.

The Federal Reserve and other global central banks could just leave us alone and allow us to create our own currencies. The cryptocurrency revolution is moving along just fine, and there is no need for any sort of interference.

But I have a feeling that the powers that be will eventually manufacture some sort of a “cryptocurrency crisis” if one does not happen naturally. In the aftermath, they will attempt to introduce some version of “fedcoin”, and many in the general public will be very thankful for the “solution” that the government has provided.

To add fuel to the fire, the U.S. government has been rigorously studying Bitcoin for about two years now… and instead of fighting Bitcoin, the Feds seem poised to wipe out the U.S. dollar by creating their own digital currency.

The National Science Foundation, a U.S. government agency that supports and funds research… has awarded $3 million to three U.S. universities for wide-ranging cryptocurrency research.

Cornell, the University of Maryland and the University of California Berkeley will focus on developing new cryptocurrency systems that, according to principal investigator Elaine Shi, will address “pain points” attributed to Bitcoin and other existing networks.

The Federal Reserve is far from alone. Other global central banks are doing their own research, and the Bank for International Settlements says that “all central banks” may eventually need their own cryptocurrencies. The following comes from CNBC…

Central banks may one day need to issue their own cryptocurrencies, the Bank for International Settlements said in its latest quarterly review.

“Whether or not a central bank should provide a digital alternative to cash is most pressing in countries, such as Sweden, where cash usage is rapidly declining,” the Sunday report said. “But all central banks may eventually have to decide whether issuing retail or wholesale [central bank cryptocurrencies] makes sense in their own context.”

This is going to be a critical phase for the cryptocurrency revolution, because the people of the world are going to have to make it exceedingly clear that they do not want central bank cryptocurrencies.

As existing fiat currencies fail, we want there to be independent cryptocurrencies that people can use as an alternative. And we don’t have to just imagine what that would look like. In fact, it is already happening in Venezuela…

But in Venezuela, the collapse of the bolivar has forced locals to turn to alternatives like bitcoin and local community-issued currencies with fixed exchange rates. The rapid erosion of the bolivar’s value made everyday transactions like buying groceries and paying cabbies untenable – customers had to pay with large, cumbersome stacks of bolivars that were difficult to transport.

Patricia Laya, a Venezuela-based reporter, tweeted a photo of the 5,000 bolivars – the maximum amount – she was able to withdraw from an ATM in Caracas. They’re worth around $0.05. Laya stated that she had waited 20 minutes in line to obtain $0.05 in hyperinflated currency worth little to no value, according to CCN.

Even though bitcoin transactions can take hours – even days – to settle, local merchants have readily embraced the digital currency.

This is a revolution that has the potential to completely change the global financial system, but I have a feeling that global central banks will never let it get that far. The current system funnels literally trillions of dollars to the very top of the food chain, and the elite are going to jealously guard their golden goose.

Would you rather own 100% of Wal-Mart or every Bitcoin in existence? At one point such a question would have been completely absurd, but now things have changed. As I write this article, Wal-Mart has a market cap of 287.68 billion dollars. Wal-Mart is the king of the retail industry in America, and nobody else is even close. Bitcoin, on the other hand, is an entirely digital creation that did not even exist until 2009. No government or central bank in the entire world recognizes it as a legitimate currency, and there are very, very few retail establishments that are willing to accept Bitcoin as a form of payment. And yet at this moment, Bitcoin has a market cap of 310 billion dollars.

When the year began, Bitcoin had just crossed the $1,000 threshold, and now it is selling for more than $18,000. Of course other cryptocurrencies have been rising at an even faster pace. We have never seen anything quite like this before, and some are warning that this is a giant bubble that is about to burst…

Axel Weber, the board chairman of big bank UBS, has warned of a possible Bitcoin currency crash. With increasing numbers of small investors jumping on the cryptocurrency bandwagon, it is time for regulators to intervene, he says.

Bitcoin has surged from $1,000 (CHF990) at the start of the year to above $16,000.

The risks are due to a design fault, which leads to huge currency swings in both directions, Weber said in an interview with the NZZ am Sonntagexternal link. “We as a bank have very consciously warned against this product, because we do not consider it valid and sustainable,” said Weber.

Of course similar things could be said about the stock market. The Dow Jones Industrial Average is up more than 34 percent in 2017 even though underlying economic activity does not support such ridiculous valuations.

Ultimately, the reason why Bitcoin is so valuable today is because people believe in it.

Those that believed in Bitcoin from the very beginning were relentless in promoting it, and that tight-knit community provided the foundation for what we are witnessing today. The following comes from Wolf Richter…

Libertarians flocked to its banner, because of the potential that Bitcoin offered, as a decentralized form of money. Bitcoin was for the community, maintained by the community and was the community.

Community was a key word. It was a word that was paramount to the success of Bitcoin. Without it, we wouldn’t see the staggering numbers we see today. This push ever onward by the community is why Bitcoin was able to get its footing and build the foundation it vitally needed to survive and prosper.

But could it be possible that the powers that be actually wanted us to embrace Bitcoin and other cryptocurrencies?

Could it even be possible that blockchain technology will someday be used as the foundation for the coming cashless society that we have heard so much about?

Who authored the document? Try not to be shocked when you learn it was authored by “mathematical cryptographers at the National Security Agency’s Office of Information Security Research and Technology.”

The NSA, in other words, detailed key elements of Bitcoin long before Bitcoin ever came into existence. Much of the Bitcoin protocol is detailed in this document, including signature authentication techniques, eliminating cryptocoin counterfeits through transaction authentication and several features that support anonymity and untraceability of transactions.

Wow.

I was stunned when I read that.

And Mike Adams has also pointed out that “the agency is also the creator of the SHA-256 hash upon which every Bitcoin transaction in the world depends.”

The powers that be could have destroyed Bitcoin and other cryptocurrencies a long time ago if they had wanted to do so.

But they haven’t.

This has always puzzled me, and up until just recently I never had a good answer for why it had not happened yet. Could it be possible that they have actually wanted the public to embrace this new technology? Brandon Smith certainly seems to think so…

Ask yourself this: Why is it that central banks around the world (including the BIS and IMF) are investing in Bitcoin and other crytpocurrencies while developing their own crypto systems based on a similar framework? Could it be that THIS infusion of capital and infrastructure from major banks is the most likely explanation for the incredible spike in the bitcoin market? Why is it that globalist banking conglomerates like Goldman Sachs lavish blockchain technology with praise in their white papers? And, why are central bankers like Ben Bernanke speaking in favor of crypto at major cryptocurrency conferences if crypto is such a threat to central bank control?

Answer — because it is not a threat. They benefit from a cashless system, and liberty champions are helping to give it to them.

Once the public fully accepts blockchain technology, all it is going to take is some sort of massive “cryptocurrency crisis” for cries for government control to reach a crescendo.

But for now the cryptocurrency revolution is rolling along, and the general public is enthusiastically embracing a cashless technology that permanently tracks and records every single transaction. As an editorial on Zero Hedge has noted, the elite could end this experiment at any time, but instead it appears that it may actually be serving their purposes…

Regardless if the blockchain is a distributed network that cannot be stopped, all one must do is outlaw the use and/or conversion of Bitcoin to the local coin of the realm to immediately stop its rapid, and profitable, propagation. Since this has not occurred to date, one must surmise there is a reason for not doing so.

All the police state needs to do is cry national security and the curtain comes down on the Bitcoin stage (d) production. You do not need to destroy the rebel force in order to render it ineffective.

While the deep state and its minions are rarely of one mind about a multitude of issues, witness the constant infighting and jockeying for position, nothing clears the mind or clarifies its purpose like the certain knowledge of imminent demise. If Bitcoin, blockchain and the hundreds of other cryptocurrencies were the mortal danger loudly advertised by the Bitcoin ideologies, it would be squashed in a New York minute.

If the elite had tried to force a cashless system on all of us, there would have been a tremendous amount of backlash.

But now the entire globe is gleefully embracing “the cryptocurrency revolution”, and most do not even realize that this is a giant step toward a cashless society.

As long as “the cryptocurrency revolution” remains outside of the grip of governments and central banks, it will be a good thing. But once the elite start cracking down and taking control, everything will change.

The cryptocurrency revolution is the biggest story in the financial world right now. In recent days I have spent a lot of time writing about Bitcoin, but the truth is that all of the major cryptocurrencies have been on an unprecedented run lately. In fact, some of them have been rising much faster in price than Bitcoin has. So even though Bitcoin is now worth almost 18 times as much as it was at the beginning of 2017, that actually pales in comparison to how fast Litecoin has been rising. Of course not all of these cryptocurrencies will eventually succeed. There are about 1000 different cryptocurrencies in existence at the moment, and most of them will inevitably fail. But for now virtually every cryptocurrency is soaring, and the total market cap for all cryptocurrencies combined is rapidly approaching half a trillion dollars.

Let’s start our discussion with Bitcoin. As I write this, a single Bitcoin is worth $17696.99, and that is absolutely astounding considering that the price was sitting at just about $1,000 as 2017 began.

We have seen the price of Bitcoin double over and over again, and this last cycle only took 22 days. At this point Bitcoin is so hot that people are actually mortgaging their homes in order to get money to invest…

Securities regulator Joseph Borg says he has seen people doing everything from running up credit card debt to mortgaging their homes to pour money into the cryptocurrency.

It’s easy, from one angle, to see why. Bitcoin started out the year being worth $1,000. On Nov. 20, Bitcoin set a new record by passing the $8,000 mark. As of mid-morning Tuesday, it was worth over $17,000. Very few investments double their value in just 22 days.

Of course Bitcoin and other cryptocurrencies don’t actually have any intrinsic value at all. They only have value because people think that they have value, and right now we are witnessing one of the wildest “financial manias” in recorded history.

In fact, Bitcoin mania has now actually surpassed the infamous Dutch Tulip bubble of 1636 and 1637 according to one analyst…

One month later, the price of bitcoin has exploded even higher, and so it is time to refresh where in the global bubble race bitcoin now stands, and also whether it has finally surpassed “Tulips.”

Conveniently, overnight the former Bridgewater analysts Howard Wang and Robert Wu who make up Convoy, released the answer in the form of an updated version of their asset bubble chart. In the new commentary, Wang writes that the Bitcoin prices have again more than doubled since the last update, and “its price has now gone up over 17 times this year, 64 times over the last three years and superseded that of the Dutch Tulip’s climb over the same time frame.”

Can Bitcoin defy financial gravity and continue to climb higher in price?

We shall see.

Meanwhile, the fifth largest cryptocurrency, Litecoin, has more than doubled in price since Sunday afternoon. And overall, the price of Litecoin has been rising much, much faster than Bitcoin so far this year…

Litecoin (LTC) has proved the underdog and is currently dominating crypto charts. In the past 24 hours, the price of Litecoin has surged over 45% hitting a new all-time high of $255.40, according to CoinMarketCap. The 24-hour trading volume for Litecoin has crossed $4.68 billion while the market cap has surpassed $13 billion. Currently the cryptocurrency is trading at $245.51.

An interesting fact is that if we closely look at the stats since the beginning of 2017, when Litecoin traded at a mere price of $4.3, the token has appreciated investors’ money almost twice as much as bitcoin has done. If to calculate the returns as on the existing date, it turns out that during the afore-mentioned period Litecoin has gained more than 5500 percent against Bitcoin’s 1800 percent.

5500 percent in a single year is absolutely crazy.

There are some people out there that have made absolutely extraordinary amounts of money investing in cryptocurrencies, and another one that is extremely hot right now is Ethereum…

Ethereum, the number two digital currency by market capitalization, topped $600 today to set a new all time high. According to CNBC, the surge comes as UBS announced they will head an Ethereum-based Blockchain initiative along with Barclay’s, Credit Suisse, KBC, Swiss stock exchange SIX and Thomson Reuters. The initiative is designed to help these companies comply with new European Union trade data standards that go into effect in 2018.

Ethereum now has a total market cap of more than 60 billion dollars.

That makes Ethereum more valuable than General Motors or Aetna.

Seriously.

After seeing all of the money that has been made, many are racing to learn how to invest in cryptocurrencies, but it is never wise to invest after a giant bubble has already formed. According to banking giant UBS, Bitcoin is “the bubble to end all bubbles”, and they are not optimistic about where things are headed…

UBS Wealth Management is not a believer in bitcoin becoming a legitimate currency even as the launch of futures lead some investors to believe the cryptocurrency will become a more stable market.

“The bubble to end all bubbles continues. Cryptocurrencies only have value if accepted as currencies. However, they cannot be used for the most important transaction in an economy, and cryptocurrency supply can only rise and never fall (making them a poor store of value),” global chief economist Paul Donovan wrote in a post Monday. “To date, using cryptocurrencies requires (effectively) a simultaneous asset sale and purchase of goods or services.”

But there are others that are entirely convinced that we are in the very early stages of a global financial revolution that is going to completely change the world. Just consider the words of Alex Stanczyk…

Imagine a world where a teenage girl in India can start a business, sell her wares or services, and then through her phone, internet, and crypto-currency store the fruit of her labor. She can then buy an item on Amazon and have it shipped to her half-way around the world without ever having to open a bank account. This is the future that crypto-currency promises.

Having transactions validated with cryptography means we can trust the math, and not have to rely on a human intermediary or the bank. The only way to compromise the cryptography requires computing power that no private (or sovereign) entity in the world can bring to bear. I have heard one crypto expert assert that the current hashing power of the voluntary nodes processing the bitcoin algorithm has more power than all of the world’s supercomputers combined. Because it is a distributed public ledger, it means that no single entity controls it, but everyone gets to see the transactions in it. This performs the primary function of every bank since Medici, which is keeping track of where the money goes. Only now, you don’t need the bank. The technology has the potential to dis-intermediate the banks, and therefore the political class, from having total control of every aspect of peoples financial lives.

In the end, the real story is not how valuable these cryptocurrencies become relative to U.S. dollars.

Rather, the real story will be whether or not these cryptocurrencies will be used to free humanity from the debt-based system that the central bankers are currently using to oppress the entire planet.

If these cryptocurrencies can be used as a tool for freedom, we should all greatly applaud that. But if they are only going to serve as speculative investments, then their ultimate value is going to be greatly limited.

One of the things that I love about Bitcoin is that the fun never seems to end. On Sunday, Bitcoin futures began trading on the Chicago Board Options Exchange for the first time ever, and within minutes the CBOE’s website crashed. What a perfect metaphor. Bitcoin and other cryptocurrencies are completely and utterly disrupting the global financial system, and the financial establishment is still groping for a cohesive response to this growing phenomenon.

For a long time the financial establishment seemed to think that if they just kept publicly trashing Bitcoin and other cryptocurrencies that they would eventually just go away. In fact, earlier today I came across a story that talked about how Deutsche Bank is warning of a “Bitcoin crash” in 2018. But what they don’t realize is that we have reached a tipping point, and the world will never go back to the way it was before.

And even though other global financial institutions are dragging their feet, an enormous threshold was crossed when Bitcoin futures were launched on the Chicago Board Options Exchange just a few hours ago…

On Sunday, the Cboe will finally launch its long-awaited bitcoin futures contract; the CME Group will launch its futures contract later this month.

This will surely add a new element to bitcoin, shifting it from a buy-side-only trade to introducing the ability to go long — or short. This should bring new, larger and institutional participants into the market.

This move will also make it more tempting for large institutions to try to manipulate the price of Bitcoin, and that is always a dangerous thing.

But overall this is being hailed as a great thing for Bitcoin, and many believe that the wild ride that Bitcoin has been on in recent weeks has been because of this upcoming futures launch. The following comes from CNBC…

The futures are cash-settled contracts based on the auction price of bitcoin in U.S. dollars on the Gemini Exchange, owned and operated by virtual currency entrepreneurs Cameron and Tyler Winklevoss.

“The pretty sharp rise we have seen in bitcoin in just the last couple of weeks has probably been driven by optimism ahead of the futures launch,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.

As I write this, the price of Bitcoin is sitting at $16,487.99, which is much higher than it was just a couple days ago. At one point it had dipped below $14,000, but it has bounced back nicely.

And this could be just the beginning for Bitcoin futures. According to CNN, Bitcoin futures will soon begin trading on a couple of additional exchanges as well…

There’s more to come. Bitcoin futures will also begin trading on the Chicago Mercantile Exchange on December 17-18, while the Nasdaq will debut the options sometime next year.

Many of us that didn’t get into Bitcoin when it was first emerging are still kicking ourselves. But one individual who did, but later abandoned his efforts, has more than 80 million dollars sitting in a landfill somewhere. The story of a British man named James Howells was recently featured by Gizmodo…

Through his computational labors, he amassed around 7,500 bitcoin before his girlfriend, fed up with the noise of block-mining hardware, made him stop. No great loss—the Silk Road was two years away and bitcoin was worth next to nothing.

Most of the equipment he was using was sold for scrap after he spilled lemonade on it, and the hard drive containing the key to his digital wallet sat in a drawer for three years before passing into its final resting place: the trash.

Near the tail end of 2013, Howells took stock of the crypto markets and began to regret his hasty cleaning decisions. At that time bitcoin’s market cap was beginning to climb, and his 7,500 lost coins were worth a few million. Four years later and he still—understandably—hasn’t let it go. One bitcoin is currently valued at $11,500, making the small fortune Howells sent to a landfill a considerably larger fortune of over $80 million.

Could you imagine being in his shoes?

That hard drive would almost certainly be virtually impossible to find at this point, but I am sure that he thinks about his lost fortune all the time.

But this is the great thing about Bitcoin. Fortunes are being won and lost outside of the control of the global central banking system, and this has got to be driving the central bankers absolutely bonkers. I have always believed that there would be a massive crackdown on cryptocurrencies someday, and this is something that Adam Taggart recently discussed with a digital currency expert…

We talked about the central banking cartel’s longstanding monopoly of the money supply and its historic ruthlessness for squashing all competition. He agreed that the central banks would like nothing more than to replace the current cryptos as well as all paper fiat currencies with digital sovereign versions. And he predicts they will likely try to do exactly this. How successful will they be? Uncertain. He can certainly foresee a time when they ban ownership of Bitcoin and its brethren, criminalize transacting with them, and shut down the exchanges. Though while the cartel may be able to seriously curtail Bitcoin et al, he doesn’t see it succeeding in driving them to extinction for several reasons. One he offered that I hadn’t heard before (but have since verified) is that private investors have put a network of satellites up in space dedicated to making it possible to transact in Bitcoin anywhere on Earth even if the terrestrial networks are taken down by the authorities or natural disaster.

I agree that it is quite likely that global central banks will eventually come out with their own digital currencies using blockchain technology. At that point it is entirely possible that they could try to ban the use of Bitcoin and other independent cryptocurrencies, and we must not allow them to do this.

The use of Bitcoin and other cryptocurrencies is one way that humanity can express independence from the global debt-based system that is systematically enslaving all of us, and so I greatly applaud the entrepreneurs that are working so hard to make these new digital currencies viable.

But the battle over currencies is just in the early chapters, and some huge twists and turns are ahead. We don’t know exactly how everything is going to play out, but it is definitely going to be a wild ride.

The price of Bitcoin continues to rise at an exponential rate, and the financial world is in a complete state of shock. Just yesterday, I marveled that the price of Bitcoin had surged past the $13,000 mark for the first time ever, but then on Thursday it actually was selling for more than $19,000 at one point. As I write this, Bitcoin is sitting at $16,877.42, but a few hours from now it could be a couple of thousand dollars higher or lower than that. Those that got in early on “the Bitcoin revolution” have made extraordinary amounts of money, and many believe that this is just the beginning.

Of course many of the most respected names in the financial world were convinced that this would never happen. For example, back in 2014 Warren Buffett encouraged investors to “stay away” because he believed that Bitcoin was a “mirage”. And not too long ago JPMorgan Chase CEO Jamie Dimon said that “if you’re stupid enough to buy it, you’ll pay the price for it one day”.

But for now, it is Bitcoin investors that are having the last laugh. If you would have gotten into Bitcoin back at the beginning of this year, your investment would be worth 16 times as much today. The following comes from CNN…

Bitcoin cracked $1,000 on the first day of 2017. By this week, it was up to $12,000, and then it really took off: The price topped $16,000 on some exchanges Thursday, and $18,000 on at least one. Other cryptocurrencies have seen similar spikes, though they trade for much less than bitcoin.

There’s a long list of factors people may point to in an attempt to explain this. Regulators have taken a hands-off approach to bitcoin in certain markets. Dozens of new hedge funds have launched this year to trade cryptocurrencies like bitcoin. The Nasdaq and Chicago Mercantile Exchange plan to let investors trade bitcoin futures, which may attract more professional investors.

Whenever we see anything go up this fast, it is inevitable that there will be a pullback, and that is precisely what we are witnessing at the moment. After soaring past the $19,000 mark, Bitcoin dropped back to under $17,000. But this pullback could just be temporary, and there are some that are absolutely convinced that Bitcoin will blow well past the $20,000 mark by the end of December.

In the long-term, experts such as John McAfee and James Altucher believe that the price of Bitcoin will reach one million dollars. But there are others that believe that Bitcoin is one of the biggest financial bubbles in history and that it will eventually end in an absolutely horrible crash.

So who is correct?

Well, it is entirely possible that both sides are correct.

Bitcoin could theoretically continue to skyrocket for the next few years if the economy remains somewhat stable. And it is also true that given a long enough time frame, virtually every financial investment goes to zero.

Just like every other financial investment, the key is to get in at the right time and to get out at the right time.

For now, Bitcoin has sparked a worldwide craze that is absolutely unprecedented. The following comes from the Washington Post…

Such warnings have not stopped the craze surrounding the currency as the sharp rise in value creates ever more demand. In South Korea, people are pouring their life savings into bitcoin and other digital currencies. In Venezuela, after observing the rise of bitcoin, the government announced it would launch its own virtual currency called the “Petro” to get around U.S. sanctions.

And of course Bitcoin has spawned a whole host of competitors. At this point there are more than 1,000 virtual currencies in existence, and that number is constantly growing.

To me, this whole phenomenon is absolutely amazing. Bitcoin and other cryptocurrencies are digital creations, and they don’t have any real intrinsic value.

But something doesn’t have to have intrinsic value in order to be extremely expensive. For example, a single painting by Pablo Picasso once sold for more than 100 million dollars. You and I may consider it to be just a silly painting, but because there are people out there that are willing to pay more than 100 million dollars for it, that is how much it is worth.

The same thing is true with cryptocurrencies. At this moment there are people willing to pay more than $16,000 for a single Bitcoin, and therefore that is what it is selling for.

Someday if this craze fades or global governments really start cracking down on cryptocurrencies, things could change very, very rapidly. So anyone that is considering investing should be aware of the risks.

But for the moment Bitcoin is on a wild ride, and it has been fun to watch. And since Bitcoin and other cryptocurrencies are not controlled by the authorities, it is easy to root for them to be successful.

However, now that they are getting so much attention it is inevitable that the heavy hand of government will come down hard at some point. In the end, government usually ends up ruining just about everything, and I have a feeling that cryptocurrencies will be no exception.